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Employer News | September 13, 2013
Employer News | September 13, 2013

Health Care Reform: Seasonal/Variable Hour Employees

Also known as the Employer Mandate and Employer Pay-or-Play, the Employer Shared Responsibility provision of Health Care Reform requires large employers to pay a penalty if they don’t provide minimum essential coverage to full-time employees and their dependents. Children, but not spouses, are considered dependents under the Employer Shared Responsibility rule. The information below reflects federal guidance as of August 2013. More details will be published by the IRS, HHS, and DOL.

Who’s affected?

Employers with 50 or more full-time equivalent (FTE) employees may be subject to the penalty.

When does Employer Shared Responsibility take effect?

The IRS announced in July that the penalties will be delayed by one year. The first Employer Shared Responsibility penalties will now be assessed in 2015.

Look-back Method

In most cases, employers are not required to offer health insurance to part-time or seasonal employees. However, a penalty may be assessed if these employees ended up working an average of 30 or more hours per week.

The look-back safe harbor gives employers a standardized way to “look back” at the number of hours worked by seasonal and variable hour employees. If they ended up working full-time hours, the employer can avoid a penalty if they offer these employees minimum essential coverage during the same period of time going forward.

Keep in mind that the look-back method (PDF) is not used to calculate the number of full-time equivalent employees to determine group size.

Find out more about the Look-back Method and how it works (PDF) | More on Health Care Reform


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